Purpose of the Bill

The purpose of this bill is to improve the management of state contracts with the federal government. It aims to ensure that Minnesota has the authority to withhold federal funds from recipients if there is reasonable suspicion of fraud.

Main Provisions

• The bill proposes a requirement for all contracts between the state of Minnesota or any state agency and the federal government to include a clause that allows the state to withhold payments.
• Withholding of payments would be permitted if a state official or employee reasonably suspects that the recipient of federal funds has engaged in intentional or deceptive actions to secure such payments unlawfully.

Significant Changes to Existing Law

• This bill introduces a new section in the Minnesota Statutes (chapter 16C) requiring this specific term be included in federal contracts. There was previously no explicit requirement for this type of contract clause in such agreements.

Relevant Terms

• Federal funds
• Withhold payments
• Fraudulent payments
• State contracts
• Intentional or deceptive act